WMCR bounces Xstrata bid

WMC Resources has knocked back a $7.4 billion takeover bid from diversified Swiss miner Xstrata, claiming the $6.35-a-share offer did not recognise the value of its assets.
WMCR bounces Xstrata bid WMCR bounces Xstrata bid WMCR bounces Xstrata bid WMCR bounces Xstrata bid WMCR bounces Xstrata bid

WMC's Mt Keith nickel operation

Rebecca Keenan

Trading in the Australian nickel, copper and uranium producer's shares has been halted after they last fetched $5.13.

The board of WMCR said it was willing to have further discussions with Xstrata and any material improvement in the bid would be considered.

Rumours regarding the takeover circulated last night, coinciding with an analyst tour of WMCR's Olympic Dam copper-uranium-gold operations in South Australia.

Chief executive Andrew Michelmore and executive general manager Seamus French addressed the 40-strong tour on Monday and an overview of the Mt Keith and Leinster operations was presented yesterday.

Today the company will present on the Kalgoorlie nickel smelter and Kwinana nickel refinery ahead of presentations by executive general manager of nickel Alan Dundas focusing on the potential for developing the nickel business.

MiningNews.net understands Dundas has not yet appeared, adding to the plausibility of a possible nickel expansion announcement.

The Sydney Morning Herald quoted UBS analyst Glyn Lawcock as saying any possible expansion had not been valued by the market.

He also said the stock could be worth as much as $5.99 to any possible suitor.

UBS is acting as corporate advisor to WMC and was today unavailable for comment.

WMCR is the third largest producer of nickel and operates two nickel mines, a smelter and refinery in Western Australia. It is also a significant producer of copper and uranium following the recent expansion at Olympic Dam.

After reporting a sound September quarter brokerage UBS placed a neutral rating on the stock at a target price of $5.35. It said the 2005 production guidance was below its expectations, in particular nickel forecasts of 65,000 tonnes, down from 70,000t.

MiningNews.net

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